Tags

February 5, 2010

On Friday, the U.S. Department of Labor released its monthly report showing that the unemployment rate unexpectedly declined in January to 9.7% from an unrevised 10% in December. However, nonfarm payrolls fell by 20,000 compared with a revised 150,000 decline in December. The two statistics are generated by different surveys, which explains how the unemployment rate improved despite a net loss of jobs. Jobs numbers are generated by surveying employers, while the unemployment rate is derived from a household survey.

Senate Financial Regulatory Bill

Senate Banking Committee Chairman Chris Dodd (D-CT) and Ranking Member Richard Shelby (R-AL) have reached an impasse during their negotiations over the Senate’s financial regulatory reform bill. Dodd and Shelby conducted a meeting Thursday that they had hoped could result in progress toward releasing a bipartisan bill. The primary point of contention between Dodd and Shelby continues to be over a possible new consumer regulatory agency. Dodd announced on Friday that he is forging ahead without Shelby and will release a draft bill later this month with the hope of gaining Republican support later in the process.

Volcker Testifies Before Senate Banking Committee

On Tuesday, White House Economic Advisor Paul Volcker testified before the Senate Banking Committee regarding his plan to decouple what he calls “proprietary and speculative activities” from traditional banking activities. During his testimony, Volcker stated “hedge funds, private equity funds, and trading activities unrelated to customer needs and continuing banking relationships should stand on their own.” During the hearing Chairman Dodd expressed frustration about the timeliness of Volcker’s proposal in relation to the Committee’s work on the legislation. Following the hearing, sources indicated that Dodd is likely to drop or change many of the recommendations in the proposed Volcker rule.

Wall Street Executives Testify About Volcker Rule

Goldman Managing Director Gerald Corrigan and J.P. Morgan Executive Vice President and Chief Risk Officer Barry Zubrow testified Thursday before the Senate Banking Committee regarding the Volcker Rule that would separate traditional banking practices from trading activities. Zubrow argued before the Committee that the trading activities did not cause the financial crisis. Corrigan testified about that the differences he sees between proprietary trading and hedging and risk-management activities driven by the interests of clients.

Jurisdictional Fight Over Derivatives

While the Senate Banking Committee moves ahead with its financial services regulatory bill, Senator Maria Cantwell (D-WA), a member of the Senate Agriculture Committee, sees the Agriculture Committee’s jurisdiction over the issue of derivatives as a point of contention between the two committees. Cantwell held a press conference Wednesday to discuss her legislation to regulate the currently unregulated derivatives market. Cantwell cited the House passed bill having ‘loopholes’ for end users or for foreign exchange contracts as the necessity for her legislation as well as the Agriculture Committee’s jurisdiction over the issue.

Republicans and Democrats Spar Over Wall Street Contributions

Last week, House Minority Leader John Boehner of Ohio met with James Dimon, the chairman and chief executive of J.P. Morgan, to express his disappointment with what Boehner sees as the Wall Street banks continuing to support Democrats with political contributions despite Republican efforts to oppose regulations many of the Wall Street banks also oppose. In response to Boehner’s meeting, the Democratic National Committee began airing ads on national cable blaming Republicans for the financial meltdown because of their efforts to block reforms.

Wall Street Bonus Tax

Thursday, Senators Barbara Boxer (D-CA) and Jim Webb (D-VA) introduced legislation that would impose a 50% tax on executive bonuses of more than $400,000 from companies that received more than $5 billion in TARP funds. While similar legislation has been defeated in the past, Boxer and Webb believe that recent bonuses at AIG will galvanize support behind their initiative.

Connect

Subscribe

Related Sites

Subscribe to Email Updates

Please leave this field empty

Name

Email *

Select list(s): Immediately Daily Weekly

Check your inbox or spam folder to confirm your subscription.

Contact Us

If you have any questions regarding anything discussed on this blog, the attorneys and other professionals of the Financial Institutions Group of Bryan Cave LLP are available to answer your questions. Please click here for a list of our Professionals or fill out the contact request form below.

Thank you for reaching out to us.

First, though, we have to tell you a couple of things:

Your email will not create an attorney-client relationship between you and us.Attorney-client relationships can only be created in writing, signed by both you and us.

Related Posts

The attorneys of Bryan Cave Leighton Paisner make this site available to you only for the educational purposes of imparting general information and a general understanding of the law. This site does not offer specific legal advice. Your use of this site does not create an attorney-client relationship between you and Bryan Cave LLP or any of its attorneys. Do not use this site as a substitute for specific legal advice from a licensed attorney. Much of the information on this site is based upon preliminary discussions in the absence of definitive advice or policy statements and therefore may change as soon as more definitive advice is available. Please review our full disclaimer.